My car is leaking oil from the valve cover...like 2 qts. every week and a half. Also, I can hear the valves clicking in the motor (95 325i) even right after I've put oil in the car. I'm pretty sure the car needs a new head, but I'm not really sure where to start. I guess what I really want to know is:
1) Where to find a good deal on a cylinder head.
2) How involved is the job of replacing the cylinder head?

Also, if the problem happens to be something like a warped valve, could I just port/polish the stock head and replace the moving parts? If I can do this I probably will, and get some kind of performance cams. I can't help but see the opportunity for a performance upgrade in everything.

1) You can probably find one at any engine rebuilder... euro rebuilder... there are a few sites... look around... go to google.com and type in e36 engine rebuild... look around.. I know there atleast two that sell refurbised internal parts.
2)Relatively extensive.. I've done it twice.. its not fun.. nor is it easy.. lots of parts to track... get a bentely manual... they have a good write up on it.. very descriptive... and helpful. Good Luck on that one. BTW thats the manual I used both times... good stuff there.

Yes... you can port and polish the head... not all that much.. but it is possible and I've seen it done... as for performance cams... www.turnermotorsports.com sell schrick cams... they are a good start... best I've found besides custom work. Most of your internal parts can come from www.pelicanparts.com they sell a good deal of the inner workings... major parts can be bought through them.. but you'd probably be better off with a euro rebuilder refurbished part.